The US Securities and Exchange Commission has updated its staff guidance on how federal securities laws may apply to certain crypto assets and related transactions, following a similar move by the Commodity Futures Trading Commission last week. The update came after the failed cloture vote on the CLARITY Act, a market structure bill many had expected would clarify how the two regulators divide oversight of digital assets.
In a Friday revision to the frequently asked questions it first issued in March, the SEC said its latest interpretation is non-binding and "has no legal force or effect, does not alter or amend applicable law, and does not create any new or additional obligations for any person." The FAQ addresses how the agency views digital asset products that may fall under the Howey test for investment contracts.
Buybacks, network activity and staking receipt tokens
According to the SEC, token issuers may conduct buyback programs for customers if "a crypto system is functional and has no central party." In that case, the arrangement would not necessarily qualify as "a representation or promise to undertake essential managerial efforts," meaning it would not automatically be treated as an investment contract under federal securities laws.
The agency offered similar guidance for crypto networks. It said that when a system is functional, services used to secure, maintain, improve or enhance that system or its functionality, or to facilitate network effects, would not necessarily satisfy the SEC's Howey analysis.
The SEC also said staking receipt tokens would not always be classified as securities.
Released days after the Senate failed to advance a market structure bill
The SEC's update followed similar guidance from the CFTC for token issuers. Both agencies published staff answers days after the Senate failed to pass a crypto market structure bill that many expected would define the roles of the two financial regulators in overseeing digital assets.
SEC Chair Paul Atkins and CFTC Chair Michael Selig had both signaled in public statements that their agencies would move to address crypto regulation even without new legislation from Congress.
Hester Peirce says she will resign on Oct. 2
Separately, SEC Commissioner Hester Peirce said on Friday that she plans to leave the agency on Oct. 2 after eight years in office. Peirce, widely known in the crypto industry as "Crypto Mom" because of her support for digital asset-friendly policies, is expected to join Regent University School of Law in Virginia as an associate professor in November.
Her departure would leave SEC leadership to Chair Atkins and Commissioner Mark Uyeda. Both are Republicans on what is normally a five-member bipartisan commission.
As of Monday, US President Donald Trump had not announced a replacement for Peirce, nor had he named candidates for the SEC's two remaining Democratic seats.